Author Topic: Garth Turner - Real Estate in Canada  (Read 510773 times)

JBTC

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Re: Garth Turner - Real Estate in Canada
« Reply #720 on: March 18, 2016, 02:22:27 AM »
http://bc.ctvnews.ca/house-flipping-concerns-as-368-vancouver-homes-sold-at-least-twice-since-2014-1.2769801

Jbtc since you asked I will refer you to some stuff that is common knowledge in this market. Not sure where you live or how informed you are about Vancouver or just trolling.

Because of privacy I am not giving you specific addresses but it is common to see houses that are up 100% or more in 18 months or to see bids of $200-500k over asking.

I can only imagine that you have no idea about what is happening in this market to make the statement  you just did. I would ask you to look into the general market, you don't need any specific address.

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Let me know how many more examples would you like.

http://globalnews.ca/news/2506976/rapid-home-flipping-in-vancouver-maybe-this-is-when-it-will-be-caught/

Look at increase on the average house.

http://www.ctvnews.ca/business/expert-tips-to-lock-down-properties-in-vancouver-s-red-hot-housing-market-1.2805228

http://bc.ctvnews.ca/red-hot-or-reprehensible-vancouver-home-sells-for-735-000-over-asking-1.2792911

Hey wisdom,

First let me apologize. I knew your statement of "10% a day" was a bit of an exaggeration, but I was too tempted to not tease a little. That wasn't nice. My bad.

I also need to come clean. I was trolling. I don't live in Vancouver, but have a lot of interest in the housing market there.

I am biased to a degree, because I have had direct property investments and always like them. For all sorts of reasons including luck, I never lost money in property. The same cannot be said of the stocks I own, despite I exert 10x more effort on the stock market.

I don't doubt at all there's significant speculation in Vancouver. My view is large speculation can only take place in the presence of strong fundamentals. Not too many are speculating in Montreal. Why?

The key task for me is to figure out how much of the prices can be justified by fundamentals, and how much due to speculation. If prices do fall, what price should I consider good?

I am a little disappointed in some of the discussions that involve mostly opinions, anecdotes, and whining (sorry), rather than level-headed facts, data, and analysis. I would always want to hear both the bull case and bear case.

Thanks for the articles though.

So one article says that 5.58% of the homes sold since 2014 were sold twice. How bad is that? I have no idea. If you have an insight, I am all ears.

In another article, quote -

"We have no idea the scope of the problem, about how much it may be inflating the real estate market," Eby said.

That's exactly what I was wondering. Too bad no one seems to know.
« Last Edit: March 18, 2016, 05:21:18 AM by JBTC »


Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #721 on: March 18, 2016, 06:20:28 AM »
I think that what will turn out to have been part of the problem in Canada is that there's a real lack of transparency in the market.

My understanding is that in the US, you can get info on almost any house, see what it sold for in the past, how long it's been on the market, etc. There are sites like Zillow and such that allow access to everyone.

In Canada, most of that info is held by the realtors associations, and they release their own frankennumbers that are heavily massaged, and their press releases are republished as fact by the media. The average person has very little insight into what actually goes on in the market, and since a large part of the current market is driven by sentiment, the realtor-distorted reality helps keep that sentiment strong and prolongs things.

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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #722 on: March 18, 2016, 06:55:08 AM »
JBTC - I wasn't exaggerating on the 10% increase in 1 day. Some of my friends have done this. Within 24 hours. In one instance in 7 hours - won the bid in the morning and had sold it by the evening.
« Last Edit: March 18, 2016, 06:58:55 AM by wisdom »

mcliu

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Re: Garth Turner - Real Estate in Canada
« Reply #723 on: March 18, 2016, 07:21:43 AM »
JBTC - I wasn't exaggerating on the 10% increase in 1 day. Some of my friends have done this. Within 24 hours. In one instance in 7 hours - won the bid in the morning and had sold it by the evening.
Interesting. The fact that anecdotes like that exist seems to points to a frothy market. I mean in how many other cities can you flip a house in a day for a 10% gain?

JBTC

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Re: Garth Turner - Real Estate in Canada
« Reply #724 on: March 18, 2016, 07:55:37 AM »
JBTC - I wasn't exaggerating on the 10% increase in 1 day. Some of my friends have done this. Within 24 hours. In one instance in 7 hours - won the bid in the morning and had sold it by the evening.

Post the US housing bubble I bought houses in Las Vegas and Phoenix in 2011, which are up nicely.

Somehow I am not confident there will be a similar profit opportunity in Vancouver and Toronto. Too many people want to live there. You need a massive overbuild to offset the demand factor. Vancouver can easily be a speculator's paradise - it's pretty, the only warm town in a cold country, and has an ocean in the west, mountains in the north, and a border in the south, all limiting expansion.

I hope you are right and I am wrong.

bbarberayr

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Re: Garth Turner - Real Estate in Canada
« Reply #725 on: March 18, 2016, 08:26:45 AM »
WARREN BUFFETT: The foundation of every market bubble is a 'sound premise'

http://finance.yahoo.com/news/warren-buffett-explains-why-market-bubbles-occur-190745165.html

The reality is there are reasons for house prices in Vancouver and Toronto to have gone higher. 

In Vancouver, you've got a desirable moderate climate and limited land supply due to the mountains and ocean.  Plus it is geographically close to the far East which is looking for ways to get some of its money out.

Similarly in Toronto, you have Canada's economic engine and the designation of the Ontario Greenbelt around Toronto which really limits new development and causes a supply / demand change for Toronto homes.

But, as Buffett says, "And the price action becomes so important to people that it takes over the -– it takes over their minds…”  The real question is has price action overtaken fundamentals - I think so, but hard to know for sure and, even if it has, even harder to know when it stops.  But, if it has, there will be a lot of downside in both markets when this comes apart.

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #726 on: March 18, 2016, 09:24:33 AM »
The rate it is moving at - this cannot be sustained for long. Feels like it is near the end but I am guilty of having thought that before too. It is going to catch a lot of people swimming naked when the tide goes out.

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #727 on: March 18, 2016, 09:54:47 AM »
The rate it is moving at - this cannot be sustained for long. Feels like it is near the end but I am guilty of having thought that before too. It is going to catch a lot of people swimming naked when the tide goes out.

So didn't HK have a real estate crash before?  Didn't Londo , Paris , New York , etc do too?
But why do they continue to be the most expensive places on the planet?     

So if Vancouver has a 20% correction - and then over the next 10 years go up another 50% - what's the risk here ?

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #728 on: March 18, 2016, 10:43:10 AM »
So if Vancouver has a 20% correction - and then over the next 10 years go up another 50% - what's the risk here ?

There was a RE crash in Toronto in the late 80s-early 90s. It took until about the mid 2000s for prices to reach their previous peak, and I'm not even sure if that was in real terms.

But if you believe that there's no risk and prices will always go up, I suppose the way to play that is to buy a bunch of properties using borrowed money. That's what everybody else is doing, and I'm sure they'll all turn out to be right.

BTW, I don't believe Vancouver is London, Paris, New York, etc.
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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #729 on: March 18, 2016, 10:49:01 AM »
The only people buying are speculators, developers and people buying their 2nd, 3rd, 4th, 5th..20th rental property. A newcomer cannot enter the market. Everyone refinances and buys more properties and flips them which increases prices allowing them to again refinance and buy more properties.

An average person is buying condos or houses 1.5 hours away from the city - this is in a city of 2.5 mil or 1/4th of the cities Vancouver is being compared to.

Obviously none of this makes sense to me, but, it does to most others.